Most of these points are probably obvious to you. However, I am going to give you five important points in designing a business model in this article.
First of all, we must address the issue that business models are not fixed and static. Rather, like a living being, they gradually grow and go through the path of evolution, and the relationship between business models and the scale and volume of businesses is not as tight and direct as it seems at first glance.
Business models are not necessarily limited to a specific industry and you can be inspired by the business model of one industry for another industry, but having a strong business model cannot guarantee your success. But it can reduce your chances of failure and you should keep in mind that innovation in business models is not as difficult and complicated as it seems at first glance.
Now let’s examine these in more detail:
The first point: structure in the business model
Business models are not fixed, but like living organisms, they gradually grow and become more complete.
It is a misconception to define a definite model for activity in the first days of establishing a business and expect that this model will be used without change and successfully and effectively for months and years.
Business models are modified gradually and over time, and parts of them are removed and new parts are added to them. Maybe even their structure will collapse completely.
Regardless of how much knowledge and experience you have in business model design, you should always be ready to modify the business model based on actual market conditions.
Many businesses and brands that were once leaders and today do not have much market share, have not failed simply because of weakness in designing new products and services. Rather, there are many cases where large businesses have failed due to insisting on a specific business model and not adapting it to the new market conditions.
The second point: communication in the business model
The relationship between business models and the scale and volume of businesses is not as tight and direct as it seems at first glance. But if we say that anyway, the scale of a business has some kind of effect on all aspects of that business, we are not wrong.
We cannot say that running a 200-bed hospital is no different from running a 2000-bed hospital.
Also, we cannot say that a supermarket that sells one million tomans a day is completely the same as a supermarket that sells ten million tomans a day.
In the same way, we cannot say that managing a library with five thousand books is one hundred percent similar to managing a library with one hundred thousand books.
Although the scale and volume of the business affects many aspects of the business, many business models can be used independently of the scale of the business. Even when the model of a large business is not fully applicable to a small business, there are still many points to be inspired and imitated.
A small travel agency with five employees can still adopt some features of a large travel agency’s business model to design its business model.
The opposite of this problem is also true. A large home appliance manufacturer can take inspiration from the business model of a small home appliance repair shop to design and develop its services.
This is the feature that makes the business model discussion attractive for managers, including marketing managers and entrepreneurs.
The third point: industry in the business model
Business models are not necessarily limited to a specific industry and the business model of one industry can be inspired for another industry.
One of the concerns that is sometimes raised in the business model field is that a significant part of what is taught today as a business model is somehow adapted from the IT industry and other technology-related fields.
Companies such as Google , Amazon , Ebay , Apple , and Microsoft are among the constant examples of business model lessons in universities and management schools in the world.
One of the realities of the world of industry and business is that at any point in time, one of the sectors of the economy is the leader. Sometimes steel factories have been the pioneers and sometimes military industries. Today, the field of information technology and the Internet has become the driving force of the world’s industry and economy.
At any stage, a significant part of ideas and initiatives are carried out in the leading industry, and other industries are inspired by those ideas and adapt those initiatives to their own conditions and needs.
The fourth point: strength in the business model
Having a strong business model does not guarantee you success. But it can reduce your chances of failure.
It is very wrong to think that we can build a successful business by learning the concept of business model and even deeply understanding it. Or to fix and save a failed business.
Business models are not a road map to success, but rather than talking about success and its path, they help us to better understand the errors and threats ahead and think of solutions to manage them.
Just because a business has a clear and specific model does not mean that it will definitely succeed. However, not having a clear and specific model can be a sign of failure or serious problems in the future.
The fifth point: innovation in the business model
Innovation in business models is not as difficult and complicated as it seems at first glance.
There is no question that many of us do not care much about innovation. The importance of innovation does not need to be emphasized and specified. But whenever we discuss the relationship between innovation and business model, we need to pay attention to two issues:
- Innovation is not limited to the use of technology, Internet and digital technology. But it also finds meaning and examples in many other areas.
- Key business models are not infinite. Rather, there are a relatively limited number that combine with each other in different ways.
90% of what we know as innovative business models is a combination of conventional business models that were used before.
